Funeral trusts have an additional benefit: if you depend on Medicaid but are not sure you fall below the program’s asset limit, transferring funds to a funeral trust may preserve eligibility for continued benefits.

Two Types of Funeral Trusts

Funeral trusts can be divided into two categories: 

  • Revocable funeral trusts
  • Irrevocable funeral trusts

The difference between a revocable and irrevocable funeral trust relates to control. If you set up an irrevocable funeral trust and transfer assets to its possession, they will be maintained by a trustee. You will not be able to revoke or otherwise rescind the agreement.

Since you no longer have direct control over the assets in an irrevocable funeral trust, you can write off the assets when applying for Medicaid or a Medicaid extension.

When you establish a revocable funeral trust, you keep control of your assets and retain the right to terminate the trust whenever you please. You can dissolve the contract whenever you wish.

However, a revocable funeral trust will not help you keep Medicaid benefits.


Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.